Bidders appear to be focused on natural gas in NPR-A lease sale

Some of the bidding patterns at the U.S. Bureau of Land Management’s Sept. 27 northwest NPR-A lease sale seemed to have “North Slope gas line” written all over them. Optimism about eventual gas line construction seems clearly to be influencing exploration strategies. (See related lease sale stories on pages 1 and 6 of this issue.)

For example, in the extreme southeast of the lease sale area Anadarko has built onto a trend of leases that it had previously established on Arctic Slope Regional Corp. and state lands near the Umiat oil field and Gubik gas field, at the southeast corner of NPR-A. And, although the Umiat field confirms the potential for oil many miles south of the Beaufort Sea coastline, most geologists view this more southern region as gas prone — thermal maturities in the petroleum source rocks increase from north to south across the North Slope and, in general, appear to favor gas generation rather than oil generation in the south.

A known gas accumulation occurs at Wolf Creek in the area of the new Anadarko leases.

ConocoPhillips has bought a series of leases that form a fairway that lines up with leases that the company purchased in 2004 in the southwest corner of the lease sale area. The ConocoPhillips leases lie in that same general gas-prone area that Anadarko has targeted.

And in this southern part of the lease sale area large geologic fold structures on the north side of the Brooks Range provide plenty of potential for petroleum traps. There is much old 2-D seismic data available for the region, and it seems likely that bidders in the sale identified structures visible in seismic cross sections when deciding on tracts to bid for.

The FEX and Petro-Canada partnership consolidated FEX’s lease position in the northern part of the lease sale area by buying leases near and to the east of the city of Barrow. The geology of this area is dominated by a major structural high known as the Barrow Arch. The Barrow Arch is associated with many of the oil fields in the central North Slope and it seems likely the companies are seeking oil plays along the arch. Oil seeps at Cape Simpson have long been known and the presence of some of the prolific North Slope source rocks coupled with geologic structures that could form good petroleum traps all point to good oil potential in the area.

It should, however, be noted that there are several gas fields near Barrow, including the Walakpa gas field immediately south of some FEX/Petro-Canada leases.

And many of the FEX/Petro-Canada lease purchases targeted an area around and southeast of the village of Atqasuk, thus extending a major FEX/Petro-Canada lease position southwest from Smith Bay. The new leases seem to encroach south into gas-prone territory.

—Alan Bailey

Editor’s note: FEX is a subsidiary of Calgary-based Talisman Energy.